Significant number of savers open cash Lifetime ISAs

An estimated 28,000 individuals have taken out cash Lifetime ISAs with Skipton Building Society – the only provider currently offering a cash version of the product.

It revealed that the new cash Lifetime ISA is proving to be popular with younger savers in particular: 51% of accounts have been opened by individuals under the age of 30.

Introduced in April, the Lifetime ISA allows savers under the age of 40 to deposit up to £4,000 each tax year. They will then receive a 25% bonus from the government on any savings put into the account before their 50th birthday.

The tax-free savings and the government bonus can be put towards a deposit for a first home in the UK, or can be withdrawn from the age of 60 for retirement purposes.

Skipton Building Society’s cash Lifetime ISA currently offers a rate of 0.5%.

Kris Brewster, Head of Products at the building society, said: ‘We believe the Lifetime ISA could make a real difference to a new generation of savers, not only in helping them get a foot on the property ladder but providing them with another option to help them save for their future too.’

Other providers offer stocks and shares versions of the Lifetime ISA. However, some have chosen not to offer the product due to its complicated rules.